It’s in the Mail: Issues Concerning Commercial Contracts in a Time of Delayed Mail

7 Min Read By: Evan W. Bolla


  • Mailing requirements in contractual agreements are still common and remain a part of how business gets done.
  • With USPS mail delivery rates slipping recently, what can parties do to protect themselves?

The mail is slowing down. Packages and letters that used to arrive in days are in some cases taking weeks. Data suggests that since the beginning of July, on-time rates for delivery of first-class mail has slipped by 10–30 percent depending on the area and region. Although much of the focus of the media’s coverage concerning these delays has centered around the upcoming 2020 election and questions surrounding funding for the United States Postal Service (USPS), such delays can create serious issues concerning parties’ commercial agreements. Despite the fact that unquestionably more and more transactions are completed through the exchange of scanned and emailed documents, mailing requirements in contractual agreements are still common and remain a part of how business gets done. Many attorneys may not have thought about the “mailbox rule” since their contracts class in law school, so it is worth reexamining during this period of postal uncertainty.

The Mailbox Rule

The mailbox rule is a common-law concept of contract law that governs the time at which an offer is considered accepted. Section 63 of the Restatement (Second) of Contracts provides that “[u]nless the offer provides otherwise, . . . an acceptance made in a manner and by a medium invited by an offer is operative and completes the manifestation of mutual assent as soon as put out of the offeree’s possession, without regard to whether it ever reaches the offeror . . . .” In other words, an offer is accepted the moment it is placed in the mail. The rule notably excludes option contracts by stipulating “an acceptance under an option contract is not operative until received by the offeror.” Further, although an offer may be revoked at any time prior to acceptance, revocation is typically effective only at the time of receipt, whereas an acceptance is effective upon dispatch.[1]

Issues That May Arise

The Buchbinder Tunick & Co. v. Manhattan Nat’l Life Ins. Co. matter out of New York provides an interesting example of the legal and factual issues that can be at play concerning mailings. The case involved whether an 80-year-old insured in failing health, after falling behind on his insurance payments, timely mailed premium payments to extend his life insurance despite the insurance carrier’s notice of cancelation.

On August 28, Manhattan National Life Insurance Company sent Mr. Buchbinder a letter that it would go on to claim was a reminder that unless he sent payment by August 31, his life insurance policy would be canceled. However, the court rejected the claim that the letter was a reminder based on ambiguous language in the letter that could have been read to extend Mr. Buchbinder’s time to pay for 31 days based off the standard mailing time between New York and Ohio. The court reasoned that because the expected mailing time of the August 28th letter was five days, the letter could not have been intended as a reminder because it would not have been received by the insured until after expiration of his time to make the payment. Accordingly, the court determined the letter was in fact an offer to provide the insured additional time to keep his insurance by making a payment within the next 31 days.

However, after the offer letter, the insurance company’s system autogenerated an additional letter on September 17 canceling the insureds policy for nonpayment. Although the court found that the September 17 letter qualified as a revocation of the prior August 28 offer, on September 24 the insured mailed his premium check, thus accepting the August 28 offer under the mailbox rule. Without a clear answer in the record, the case was remanded to the trial court to answer the factual question of whether the insured received the insurance company’s September 17 revocation, which unlike acceptance of an offer, became effective only upon receipt.

Accordingly, whether the carrier was able to cancel coverage would turn on whether the carrier could prove when it mailed the revocation and, more importantly, when it was received by the insured. Although what ultimately occurred to Mr. Buchbinder’s policy does not appear available in the public record, it is easy to see the uphill battle the insurer would have if this played out in today’s climate. With reports suggesting that as much as 30 percent of first-class mail is delayed, a party may be able to present a compelling case against presuming standard delivery times and that delivery was made by a certain date.

Although things have probably not yet reached a point where courts will bring into question the longstanding doctrine of presumption of regularity, which requires a court to presume a letter or notice that is mailed is received by the addressee, such presumption may become open to attack if conditions worsen. In Republic of Sudan v. Harrison[2], the U.S. Supreme Court found that mail must be sent to a foreign minister’s office in his home country, not the embassy on U.S. soil, to be effective. The Court relied on section 66 of the Restatement (Second) of Contracts, which lays out the standards to ensure that acceptance is actually made upon dispatch. Outside of the “properly addressed” requirement relied on by the Court, section 66 offers insight into “other precautions” that may be relevant in light of recent concerns with the management of USPS:

The other precautions to be taken depend on what is ordinarily observed to insure safe transmission of similar messages. In cases of acceptance by mail, the postal regulations are ordinarily controlling on such matters as the necessity for prepayment of postage. In unusual circumstances, however, as when the mails are stopped by war, reasonable diligence may require more than compliance with postal regulations. Unless the offeror manifests a contrary intention, an acceptance is not effective on dispatch if the offeree knows or has reason to know that it will not reach the offeror.

Accordingly, if the trend of issues with the USPS continues or worsens, arguments may become available that current issues amount to “unusual circumstances” where mailing alone is inadequate.

What To Do?

Although the first answer that comes to mind is to not use the USPS, it is important for businesses to check the specific language in any contract to determine whether a specific method of delivery is required. This is particularly true in the case of insurance agreements, leases, and mortgage contracts, which often contain antiquated boilerplate language. These provisions must be strictly complied with because courts still regularly hold that delivery and notice provisions must be followed in accordance with the specific terms of the agreement.[3]

With that said, there are still some simple steps parties can take to protect themselves:

  • Review your agreements and ensure you understand any method of transmission requirements.
  • Where the agreement provides for methods beyond the USPS, use those methods.
  • Document your mailings: if you are mailing a document that must be sent by first-class mail, additionally send an email providing a copy of the document and memorializing that it was mailed that day.
  • Avoid sending offers and revocations that are not effective until receipt by mail and instead use means of instant communication where available.
  • Ensure new agreements do not limit the means of notice to the USPS and modify existing agreements to allow for alternative means.
  • Expect delays in receiving mailed materials and do not take adverse action until a reasonable time has passed.

Until the issues with the USPS are resolved, attorneys and businesses should take extra precautions to ensure they are protected.

[1] See e.g., Buchbinder Tunick & Co. v. Manhattan Nat’l Life Ins. Co., 219 A.D.2d 463, 466 (1st Dep’t 1995).

[2] Republic of Sudan v. Harrison, 139 S. Ct. 1048, 1057 (2019)

[3] See e.g., JPMorgan Chase Bank, Nat’l Ass’n v. Nellis, 122 N.Y.S.3d 673 (2d Dep’t 2020) (“The plaintiff similarly failed to establish, prima facie, that it mailed a notice of default to the defendant by first-class mail as required by the terms of the mortgage as a condition precedent to acceleration of the loan.”).

By: Evan W. Bolla


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